The housing market is booming even during the pandemic

With the advent of Covid-19, almost every industry was badly hit, leaving millions of people out of work and hungry. However, in the middle of this crisis, the housing market boomed and the demand for housing in India started outpouring. This is also because of a change in stance in the banking system. But it is difficult to understand why the real estate market is booming. One of the reasons could be millennials entering the prime homebuying age.

According to research conducted in 2020, 75% of millennials want to buy a home in the next three years. The survey included around 1,200 middle-income millennials with an annual income of over Rs 7 lakh. There might be several reasons for this possible shift, which include a sharp rise in disposable income and greater access to home financing possibilities. As per a report in the Economic Times, millennials in India account for 46% of the total workforce with an average spending capacity of $3.6 billion.

The realty sector remains resilient and is most likely to remain so amid the economy’s ongoing recovery. The housing sector is expected to grow further in response to the sharp acceleration in home sales. Ankit Pradhan, Founder, and CEO, Realty Assistant believes that millennials prefer a modern lifestyle with a lot of open spaces and a host of plush amenities as for them, a home is not only a space to live in but it’s an extension of their personalities. The market has seen a massive outpouring for theme-based living and residential complexes nestled in a peaceful and greener environment,” he adds.

As Covid-19 has forced people to spend more time at home, there is an increased demand for larger 3 BHK spaces. However, the budget will remain a significant parameter for millennials, who usually allocate around 30-50% of their aggregate monthly income as EMI. The pandemic has somewhat made them realize the importance to buy a home as it can be a part of asset creation.

The millennials are very well aware of what they want and need and have the flexibility of choosing where they want to purchase a house. In 2020, mortgage rates fell to a record low at 2.88% with an average of 0.8 points, while in November 2018, it was around 4.94%. This shows the rates have fallen by more than two percentage points. Real-estate purchase decisions should be analyzed before buying a property. Though, calculation of the estimated property appreciation is advisable.